Econ Unit 2 Vocab

50-20-30 rule

Savings rule: 50% to necessities, 20% to savings and debt repayment, and 30% to flexible spending

ATM

Automated Teller Machine: Withdraw, Deposit, Check account balance

Balance

Amount of money in your bank account

Bank Statement

A monthly document from the bank that shows your transactions

Certificate of Deposit (CD)

A bank product that earns interest on a lump-sum deposit that’s untouched for a predetermined period of time

Canceled Check

A check that’s been paid or cleared by the bank. It will appear on your bank statement.

Check

A written, dated, and signed order to the bank that tells it to pay a definite sum of money to a payee

Checkbook

A handy portfolio that holds your check register, checks, deposit slips, receipts, and other records ATM/debit card transactions

Check Cashing Store

A business that cashes checks and gives the customer cash in exchange for a fee for the service

Check Register

A record that allows you to keep track of checks you’ve written, ATM/debit card transactions, and deposits and withdrawals

Compound Interest

Reinvesting earned interest back into the principal, so that interest is calculated on both the initial amount and the accumulated interest

Cost-Push Inflation

Inflation caused by an increase in production costs, but demand is the same

Credit

A sum of money deposited INTO an account

Credit Card

A card that allows the holder to make purchases without cash by borrowing money

Debit

A sum of money deducted FROM your account

Debit Card

A card that is directly connected to your checking account; it enables you to conduct ATM transactions and to make purchases instead of using cash or writing a check

Demand-Pull Inflation

Inflation caused by an increase in demand, but supply is the same

Deposit

Money you put into your account

Deposit Slip

A form you fill out to credit money to your account when you make a deposit

Digital Wallet

An application that runs on mobile devices. It securely stores your payment information and passwords and allows you to pay for items without needing your physical cards

Direct Deposit

An automatic electronic deposit of net pay to an employee's designated bank account

Emergency Fund

Money set aside for unanticipated expenses or loss of income

Endorse

To sign the back of a check made out to you so it can be cashed or deposited

FDIC Insurance

Protection provided by the Federal Deposit Insurance Corporation; protects the deposits of customers against loss up to $250,000 per account

Federal Deposit Insurance Corporation (FDIC)

The government agency that insures customer deposits if a bank fails up to $250,000 per individual depositon

Health Savings Account (HSA)

An account in which you can save pre-tax dollars to pay for out-of-pocket health care expenses

Inflation

The rate at which the price of goods increases and consumer purchasing power decreases over time

Interest

A fee paid to you for keeping your money in an account OR a fee charged to you for a loan or credit card

Impulse Buying

The buying of goods without planning to do so in advance, as a result of a sudden whim or urge

Living Paycheck to Paycheck

Using most or all of your monthly income to cover your monthly expenses, leaving little to no spare cash for saving or investing

Low Balance Alert

A notification that lets you know if the balance in your checking account goes below a set amount

Maintenance Fee

A monthly fee that some banks charge to provide access to checking or savings accounts

Minimum Balance

A certain amount of money that must be kept in an account as required by that particular financial institution

Mobile Deposit

A mobile banking tool that allows you to deposit checks to your bank account using your mobile device

Monetary Inflation

Inflation caused by growth in the economy's money supply

Money Market Savings Account

A type of savings account that may allow debit card and check writing privileges

Money Order

A certificate that allows the stated payee to receive cash on-demand, usually issued by governments and banking institutions

National Credit Union Administration (NCUA)

The U.S. administration insuring deposits in U.S. credit unions against credit union failure up to $250,000 per individual depositor

Online Bill Pay

A consumer banking technology that allows you to schedule and make payments over the internet

Online Savings Account

A type of savings account, typically offering higher interest rates, that is managed entirely online with no physical bank branch

Outstanding Check

A check that has been written but has not yet been cashed or deposited by the payee

Outstanding Deposit

A deposit that has been made but not yet added to the person's bank account

Overdraft Fee

A fee charged to your account when it lacks the funds to cover a withdrawal, but the bank allows the transaction to go through anyway

Overdraft Coverage

A loan banks offer to their customers when they try to withdraw more funds than they have in their account, usually for a fee and with interest

Payee

The person to whom the check is made payable

Pay Yourself First

A method of saving whereby you put a fixed amount of income into a savings account before you pay monthly bills or make purchases

Person-to-Person Payment

A digital payment method that allows you to transfer funds from your bank account to that of another person

PIN

Personal Identification Number needed to use an ATM card

Postdate

To write a future date on a check

Prepaid Debit Card

A card that is loaded with a specific cash amount before you use it. It is not linked to a bank or credit union account.

Principal

Original amount of money saved or invested, separate from interest or earnings

Purchasing Power

The number of goods and services that money can buy. It can weaken in time due to inflation.

Reconcile

To compare your bank's monthly account statement with your own records of activity for the same account

Roth IRA

An individual retirement account that allows a person to set aside after-tax income up to a specified amount each year

Rule of 72

A popular trick to find out how many years it will take your money to double depending on what interest rate you are receiving

Signature Card

A document that financial institutions use to authenticate a customer's signature when opening new accounts. It includes information such as name, birth date, etc. 

Simple Interest

Interest paid on the principal alone

Transaction Fee

A fee that is charged if the number of withdrawals from your savings account exceeds the federal limit, which is six free withdrawals and transfers per month

Traveler’s Check

A check used to buy goods or services or be exchanged for cash when traveling for greater security

Unbanked

A term used to describe a person who does not use or does not have access to traditional financial services

Underbanked

A term used to describe a person who has a bank account, but often relies on alternative financial services such as check cashing

Unit Price

The cost for one item or measurement that allows it to be easily compared to other products to evaluate which is a better deal

Unusual Activity Alert

A notification that lets you know when there is suspicious activity with your account

Voided Check

A check with "VOID" written across it so that it can no longer be used

Wealth

A measurement of your assets (money you've saved or things of value you own) minus your liabilities (money you owe others); also called net worth

Wire Transfer

An electronic communication that moves funds from an account in one bank to an account in a different bank instantly. It is a useful option to send money securely when the two parties are not in the same geographic location.